3M Subsidiary Files Appeal Over Earplug Lawsuit Bankruptcy Dismissal

After a federal judge officially dismissed a 3M earplug lawsuit bankruptcy filing late last week, rejecting attempts to force the settlement of claims being pursued by military veterans left with hearing damage through the bankruptcy system, the company’s Aearo Technologies subsidiary filed an immediate appeal this week, which may further delay the litigation.

More than 255,000 U.S. veterans are currently pursuing 3M earplug lawsuits, each raising similar allegations that 3M Company and Aearo sold defective earplugs to the U.S. government for years, which resulted in permanent hearing loss and tinnitus following military service.

The earplugs were standard military issue between 2003 and 2015, and plaintiffs allege that the manufacturers knew the earplugs failed to properly seal the ear canal, leaving service members without adequate ear protectors during combat and training exercises.

Given common questions of fact and law raised in the litigation, all claims brought throughout the federal court system have been centralized for the past three and a half years before U.S. District Judge Casey Rodgers in the Northern District of Florida, as part of an MDL or multidistrict litigation.

Following a series of massive damage awards returned by juries in early cases that went to trial in the MDL, the manufacturers decided to pursue a controversial 3M earplug lawsuit bankruptcy plan, where the fully owned subsidiary Aearo Technologies sought to force the litigation into the bankruptcy court, even though it’s multi-billion dollar parent company is well funded and directly profited from sale of the earplugs for years.

3M Earplug Lawsuit Bankruptcy Dismissal and Appeal

The bankruptcy filing has been widely criticized by plaintiffs lawyers and legal experts, as nothing more than an attempt by 3M Company to delay the litigation and prevent additional cases from going to trial.

U.S. Bankruptcy Judge Jeffrey Graham issued an order on June 9, dismissing 3M’s Aearo bankruptcy filing, after determining that the 3M subsidiary was not in any real financial distress to warrant bankruptcy at this time.

The ruling sets the stage for a current stay on the litigation to be lifted, allowing thousands of lawsuits to once again be set for individual trial dates in courts nationwide.

In late May, Judge Rodgers indicated that additional 3M earplug bellwether trials will soon get underway, with a group of five cases identified that will be returned to the U.S. District Court for the Middle District of Florida as soon as the current stay is lifted. In addition, another 36 cases have been identified, which will be transferred to at least 17 different federal courts shortly after the first group is sent back to Florida.

However, 3M’s Aearo subsidiary filed a motion on June 14, calling for an appellate court to review and overturn the decision to dismiss the bankruptcy filing, which may delay the removal of the stay on active litigation.

3M and Aearo argue that the litigation has grown out of control, and that the only way to settle the earplug hearing loss lawsuits is through a bankruptcy filing. Plaintiffs and judges have disagreed, noting that 3M has plenty of financial strength to resolve the cases without such a move, which would severely limit the payout to veterans allegedly injured by the company’s earplugs, which were standard military issue for years.

June 2023 3M Earplug Lawsuits Update

The bankruptcy judge’s decision to reject the Aearo Technologies’ filing is likely to put further pressure on 3M in ongoing settlement negotiations, which Judge Rodgers ordered to continue in early May after suggesting that 3M has engaged in a “brazen abuse of the litigation process”.

The scheduling of additional 3M earplug trials in U.S. District Courts nationwide will further increase pressure on the manufacturer to establish a settlement framework or plan to address the massive liability it may face from individual juries.

Prior estimates had suggested the company would need to pay more than ten billion to settle the earplug lawsuits during early mediations. However, unless the Aearo bankruptcy dismissal is overturned on appeal, the average cost of 3M earplug settlement protections are likely to increase dramatically.